Polly Toynbee has a good piece up at CiF today, arguing that our economy’s been too long dependent on property values:

The nation is still deeply dependent on house prices rising for ever. We still live in a bubble economy, with no way to live except by reinflating it. The state itself has been mainlining on the house-price drug, as addicted as the happy home-owners.

As Kammo pointed out – although I can’t find the exact article – it is ridiculous to assume that falling house prices are in and of themselves a bad thing. In fact it can be good because falling prices allow young people to get on the ladder. During the boom years I was hard pressed to find acquaintances who could afford to rent, let alone buy. And the buy-to-let scum will be hammered and that is good.

Another pertinent question is: why is everyone in this country so obsessed with buying a home? Much of our news and cultural output is devoted to it in some way. I was talking to a student from Germany the other night, and she said that her country doesn’t share the British home-ownership neuroses. Apparently, people just rent most of their lives, and buy when they retire.

I think that’s a better way than our total identification with a single property – the idea of paying half my salary to a mortgage company for twenty years, and being tied to a specific place for decades, gives me the horrors. As Kerouac said, the one and only function is to move.

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3 Comments

Lobby Luddsaid,

“Another pertinent question is: why is everyone in this country so obsessed with buying a home?”

I don’t know whether it is either ‘obsessed’ or ‘buying’, but there certainly is a pressing need for a roof over your head. With the selling off of council housing then buying has become more common, I would suppose. I found it cheaper to buy, and with children there is pressure against frequent moving.

I am aware that in, say, Germany many more people rent, and I have rented there decent housing at a decent price. I suspect there are many people in Germany who cannot afford to move since that would mean giving up certain security they have as current tenants and negotiating a new tenant relationship relationship elsewhere.

voltairespriestsaid,

Actually yes I think there is an obsession with “buying” (you’re right about the inverted commas, for all the obvious reasons – for most people it’s actually decades of HP, not “buying” outright, etc). Many, many people see “owning” a house as a mark of their worth in the world, or as an attainment in itself – and that I think is very much a product of the 80s.

“…In fact it can be good because falling prices allow young people to get on the ladder. During the boom years I was hard pressed to find acquaintances who could afford to rent, let alone buy. ”

research,found that only one in 10 potential first-time buyers had a deposit of at least 10% that is currently needed to get on to the property ladder…only 12% of people aged under 40 who did not currently own their own home had £16,000 or more in savings – 10% of the average property price of £160,000

Single people aged between 25 and 34, young couples and younger families are most likely to find themselves in negative equity, as these groups are likely to have taken out mortgages with high loan to value ratios near the peak of the housing market….anyone who took out a mortgage and around half of those who have remortgaged since 2005 were likely to either already be in negative equity, or be very close to it.

Not so good prospects for young as you probably hope it might be . Banks are not over-lending as they once did , recession means also people cannot save .